Rival political factions in war-divided Ivory Coast have expressed optimism over new decisions by the African Union aimed at getting the stalled peace process back on track. The new deal has helped dispel widespread fears of renewed fighting in the West African nation.

Under recommendations made by the African Union, after its summit in the Ethiopian capital Addis Ababa, Ivorian President Laurent Gbagbo will remain in power after his five-year mandate expires at the end of this month.

The president, as well as the U.N. peacekeeping mission in Ivory Coast, previously said that presidential elections due to take place October 30 would be impossible.

Rebel forces and opposition leaders had called for a transitional government to replace Mr. Gbagbo. But the president said he would not step down, and that the constitution was on his side.

This latest AU decision is meant to avert what many in Ivory Coast had expected would be a leadership crisis that could spawn renewed violence in the country's three-year-old civil war.

The head of the youth wing of President Gbagbo's political party, known as the FPI, Navigue Konate, says he is pleased with the new deal.

"The government is not able to have disarmament and elections," he said. "So, they have realized that President Gbagbo is doing what he has to do. And so, they don't find it necessary to change him."

Under the agreement, which follows recommendations from the West African bloc, ECOWAS, Mr. Gbagbo will remain in power for another 12 months.

An international working group will be set up to monitor progress toward implementing previous peace deals.

And a new prime minister will be chosen to replace Prime Minister Seydou Diarra and lead the country toward disarmament and elections.

Leaders of the parties opposed to President Gbagbo are greeting the recommendations with guarded optimism. But a member of the opposition bloc, known as the G7, Joel N'Guessan, says the A.U. solution could still be derailed in its implementation.

"It is not a bad solution," he said. "But we must pay attention about the change of the prime minister, and the power he will have to manage the new government."

Representatives from the rebel New Forces, which hold the northern half of the country, said they were not yet ready to comment.

The peace process has repeatedly foundered, as successive deals to end the war have never been fully implemented.

The United Nations, with the help of French soldiers, patrols a buffer zone separating government forces in the south from northern rebels, and fighting between the two sides is rare.

Earlier this year, President Gbagbo allowed the candidacy of popular northern opposition leader Alassane Ouattara, in a future presidential election. He also made long awaited legal changes. Both had been required under the peace process. But rebel forces refused to disarm.